Bank auditors still not tough enough, warns the accountancy watchodog

The quality of bank and building society audits is still below par seven years after the financial crisis, the accountancy watchdog has warned.

The Financial Reporting Council (FRC) said bank and building society audits – which are meant to reassure shareholders and customers the accounts give a true and fair view of a lender’s financial situation – are ‘below average’.

It has launched a wider investigation to find out why the big firms – Deloitte, PriceWaterhouseCoopers, EY and KPMG – have been so slow to raise the quality of their auditing of Britain’s largest lenders.

One of the five financial sector audits assessed by the FRC revealed a need for ‘significant improvements’.

No bank audits were classed as ‘good’ and more than half needed significant improvements. The names of the institutions concerned and their audit firms have not been disclosed.